Yakama tribal cigarette maker could face $30M tax bill

A Yakama tribal cigarette manufacturer could be on the hook for some $30 million in federal tobacco taxes under a recent federal court ruling.

Delbert Wheeler, owner of King Mountain Tobacco in White Swan, along with the Yakama Nation, sought an order in January of last year in U.S. District Court blocking the Alcohol, Tobacco and Trade Bureau from assessing federal excise taxes on cigarettes and other tobacco products he manufactures on tribal land.

Held in federal trust, tribal land and products directly derived from it are exempt from federal and state taxes. Wheeler argues that his business is also exempt because it’s situated on tribal land deep within the Yakama reservation, where he grows a portion of his tobacco.